Chindata to go private in $3.16 billion deal with Bain Capital

Chindata Group has confirmed its decision to go private in a newly improved deal worth $3.16 billion, collaborating with investor Bain Capital.

This development brings an end to the uncertainty that has surrounded the future of the Chinese data centre operator. Alternatives like China Merchants Group had also expressed interest in Chindata.

Bain Capital, which holds 87% voting power and 42% outstanding shares in Chindata, has proposed an all-cash offer valuing each American depository share at $8.60.

This price marks a 7.5% increase from the initial proposal in June and represents a significant 43% premium over Chindata’s share price before the offer was made public.

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As a result of this news, Chindata’s US-listed shares experienced a 3% rise after the announcement. The company operates data centres across China, India, and Southeast Asia.

The growing demand for data centres is evident due to the increasing reliance on online services by businesses.

Additionally, the surge in artificial intelligence services, like ChatGPT, which require substantial computing power, is contributing to the data centre industry’s growth.

Bain Capital, which took Chindata public on the Nasdaq in September 2020, stated its intent not to sell any shares despite receiving a $3.4 billion bid from China Merchants Capital earlier this year.

Chindata intends to finance the privatization through a combination of cash and debt financing, facilitated by Shanghai Pudong Development Bank. The deal is expected to conclude either in the fourth quarter of 2023 or early next year.